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Nagra v. Oganesyan, 2020 ONSC 315 (CanLII), <http://canlii.ca/t/j4q4x

  

[2]               This action arises from a motor vehicle accident on January 25, 2013. Twelve vehicles were involved. There are at least seven defendants and eight third parties.

[3]               Mr. Nagra issued the Statement of Claim on December 22, 2014. Mr. Price was not served with the Statement of Claim until June 17, 2019.

POSITION OF THE PARTIES

[4]               Mr. Nagra seeks to extend the deadline to set this action down for trial: see Rule 48.14(5)–(7) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Mr. Price submits that the action should be dismissed for delay because Mr. Nagra has no acceptable explanation for the delay. Mr. Price also submits that he has been prejudiced by the delay as follows:

1)        He has lost the ability to conduct surveillance to determine the impact of the accident on Mr. Nagra’s ability to work and perform his recreational and non-recreational activities;

2)        His ability to conduct surveillance to determine the accuracy of Mr. Nagra’s claim has been compromised;

3)        His ability to obtain a timely vocational/medical assessment has been compromised; and

4)        The delay has led to diminished recollection as memories of witnesses fade.

[5]               Mr. Nagra explained that the delay was due to his decision to first pursue a WSIB claim. A resolution under the WSIB claim could have rendered the action against Mr. Price unnecessary. He further explained that he attempted to serve Mr. Price and was unable to do so. Mr. Nagra also submits that there has been no non-compensable prejudice because counsel for Mr. Price has been aware of the action since June 2018 when he received a copy of the Statement of Claim. He submits that counsel for Mr. Price has had an opportunity to investigate the case due to his defence in several companion actions that arise from the same accident. Discoveries have also not been conducted.______________________________________________________

Kanani v. Economical Insurance, 2019 ONSC 7201 (CanLII), <http://canlii.ca/t/j4q4q  

[3]            The principal claims in this action against Economical are;                       

 i.     the breach of its duty to act in utmost good faith.                       

 ii.     retroactive and ongoing Attendant Care at the maximum level for two attendant caregivers.                     

 iii.     statutory interest at a rate of 2% per month, compounded monthly under Bill 164 from the accident date.

[4]            The Plaintiffs state that Economical have simply claimed that the reserve information is not relevant as to how it assessed or failed to assess the Kanani claims or how it reported those claims, and therefore it is submitted that is the issue in these motions.  The Plaintiffs essentially submit that this is a rare, exceptional and extraordinary action in which the internal activities and operations of Economical have been impugned requiring full disclosure of the complete internal file, including reserves.  The Plaintiffs position is that Economical had sufficient information to be able to determine that the benefit should have been assessed and paid, therefore production and review of the reserves would indicate exactly what Economical considered with respect to the present and future benefit for attendant care needs, and that Economical’s duty to act in utmost good faith extends through the litigation.

[16]         An insurance company is required to maintain reserves for all claims which have an open status.  This is because it takes some time for the company to determine the full indemnity amount under the policy and related expense amounts for the claim, then pay out and close the claim.  While the claim is open, the company is required to set aside funds to allow them to make future payments should claims be advanced.  Besides reserves for each claim, the company also carries a ‘bulk provision’ for reserves for the following reasons;(a)   at any point in time, there are some claims which have already occurred but have not been reported and therefore do not have any reserves on them;(b)   there will be some claims where the final payments will be greater than the reserves created for them, based on additional information on these claims as well as unforeseen developments, like health complications from an injury; or(c)   some closed claims will also re-open based on new information that comes to light.

[17]         Reserves are maintained to allow for payment should claims be advanced.  Each adjuster reserves an active case because they are required to under the Insurance Act.  This applies to all claims.  Both the individual claim reserve and the ‘bulk provision’ are required to be included within the ‘liability’ section of the insurer’s balance sheet to provide an accurate reflection of the financial condition of the company, as required by the aforementioned legislation.  Reserves are estimated amounts assigned by an insurer to account for the total possible future payout of a person’s claims arising from an accident.  Reserves include not only benefits but legal costs, claim expenses and reinsurance conditions.  Reserve amounts are a required prudential mechanism to set aside funds to meet future obligations.  Claim reserves are an estimate of the ultimate future cost of resolution and administration of claims.

[18]         Following receipt of notification of the loss, initial reserves are posted when an adjuster is assigned to a claim for lines of payment for which immediate funds may be required, pending receipt of further information.  Once further information is received, additional reserves are posted and additional reserve lines are opened as required.  Within 30 days of the preliminary reserves being posted, reserve lines are opened/increased for medical benefits, rehabilitation benefits, attendant care benefits, cost of examinations, and damaged clothing.

 [23]         The Plaintiffs rely on the statement that “reserving and adjusting are intertwined.”  Reserves are created and affected by the ongoing assessment adjustment of the claim, as new information comes in.  However, the adjustment of the claim is not affected by the presence or quantum of reserves.  This is specifically acknowledged where the Plaintiffs state:  “How you adjudicate the case affects the reserve, what information you get.”  However, that reserves and adjusting may be “intertwined” does not necessarily make reserves relevant to this litigation.  Similarly, the Plaintiffs concede this is not a case where the setting of reserves is alleged to have influenced the conduct of Economical.

[24]         Economical submits that the allegations demonstrate the potential for misuses of reserves information.  Reserves are not the equivalent to entitlement.  Entitlement is established under the SABS by submission of a claim for attendant care and adjustment of that claim to determine entitlement.  The Plaintiffs confuse reserves and entitlement and seek to eradicate the separate spheres between adjusting and reserves, it is argued.